Research On The Motivation And Economic Consequences Of Family Business Divestiture

In recent years,especially after the international financial crisis in 2008,the cases of divestiture of assets in China have increased significantly,and researches on divestiture are also gradually enriched.This paper focuses on the analysis and discussion on the reasons and economic consequences of the unique divestiture case of Bai Caowei.This paper,based on the principle of combing theory and practice,will explore the causes and economic consequence of divestiture case of family-owned enterprises from typical cases.In the research of the motivation of cases,Harvard analysis framework,the theory of normalization and the perspective of shell resources are used to analyze.In the study of economic consequences of cases,the event study method,EVA evaluation system and potential risk research are used to analyze and describe it.Through a comprehensive and systematic analysis,the paper concludes that:firstly,the management of the company may hide the real cause of the event due to self-interest attribution,and choose to publish the favorable motivation.Secondly,the motivation of asset divestiture is not only easy to observe,such as solving financial difficulties and carrying out refocusing strategy adjustment,but also to prepare for the shell clearing,and the tunneling behavior of large shareholders may also exist in the non related transactions.Finally,the short-sighted behavior of listed companies,despite the self-interest attribution,is still difficult to be recognized by the market,even if it will have a certain positive effect,it is not lasting,or even increase potential risks.The above research results can be used as a reference for listed companies,investors and regulators to study divestiture,and provide a method to analyze the causes and predict the consequences,so as to help them make the right choice.